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Fri12132019

Last updateTue, 18 Sep 2018 1pm

Coachella finally caught on to the craft-beer revolution with the birth of the Craft Beer Barn in 2014. When it comes to weed, however, the festival seems to be further ahead of the game, thanks to this year’s introduction of a WeedMaps-sponsored cannabis lounge for VIP ticket holders—just a few months after legalization was approved by California voters.

Meanwhile, another marijuana event, located just a couple of miles from Empire Polo Club at the corner of 50th Avenue and Calhoun Street in Coachella, could not get off the figurative ground.

Kushella Life was a cannabis festival open to the public, with free admission for Coachella Valley residents, slated for both Coachella weekends and Stagecoach weekend. Organizers worked with the city of Coachella to secure all permits required to enable the legal consumption of marijuana on the festival site. Produced by the Coachella Grow Association and Coachella Ventures, Inc., the festival was a place to purchase and consume cannabis for Coachella attendees and valley residents alike.

However, typical bureaucratic delays prevented permits from being issued until the event date was a mere three weeks away, which left organizers with an unfortunately short amount of time to recruit vendors, promote the event and book musical acts.

“We agreed to meet with the sheriff and a contingent of residents, and we did. Everyone was agreeable to the plan we laid out,” said executive producer Freddie Wyatt via phone from Washington, D.C., on Monday, April 17, after Kushella’s opening weekend. He had already traveled to another event to help Kushella Life organizers cut their losses. “Everyone with the city of Coachella, from the fire marshal right on up to the mayor, was an absolute pleasure to work with. They were on board. They wanted to do it, and they wanted to do it right, which we appreciated.”

Alas, the cooperation was too little, and way too late. Attendance was estimated at around 1,000 on Saturday, April 15, the festival’s biggest day.

“Peak time was Saturday, and next weekend should be bigger. With three weeks to promote, that’s about what we expected,” Wyatt said during that Monday, April 17, phone call.

There were high hopes for the second weekend of the festival, which was slated to start a day early in celebration of 4/20—but it was not meant to be. On Wednesday, April 19, organizers decided to pull the plug and cut their losses.

“Our sincere thanks to the city of Coachella, its mayor, councilmembers and management,” said an announcement on the Kushella Life Facebook page. “Thank you all for your support! Due to circumstances beyond our control, Kushella Life will not move forward as planned, and has been cancelled. We are hopeful that the event will return in late 2017. Once again, thank you, and we apologize for any inconvenience.”

Wyatt remained optimistic when I texted him on the day of the cancellation. “Yes, we will retool and be back for next year, for sure!” he said. “We were obviously over-equipped this year, but that’s the plan.”<hr


Canada Moves Toward National Legalization

Canadian Prime Minister Justin Trudeau introduced legislation on Thursday, April 13, that would legalize marijuana for recreational use.

The proposed change would take effect in July 2018. Canadians would then be able to purchase flower, extracts and edibles from licensed shops, and grow up to four plants. While the change would allow Canadians 18 and older to possess up to 30 grams of dried flower, provinces, territories and cities could pass more-restrictive laws, if desired.

If passed, Canada would join Uruguay as the only countries to completely legalize cannabis for recreational use.

The bill’s introduction was the fruition of a campaign promise Trudeau made in 2015 to end the Canadian prohibition of cannabis. In the announcement, the Canadian government said ending prohibition “would mean that possession of small amounts of cannabis would no longer be a criminal offense and would prevent profits from going into the pockets of criminal organizations and street gangs.”

Down here in the United States, cannabis is still listed as a Schedule I narcotic, meaning cannabis-industry finances are excluded from Federal Deposit Insurance Corporation (FDIC) protection. This has made investors wary, meaning that billions of dollars could go to Canada and its more-cannabis-friendly banking environment rather than being spent in the U.S.

It remains to be seen if this will happen. We may find out over the next year ...


U.S. Senate Considering ‘Path to Marijuana Reform’ Package of Bills

Attorney General Jeff Sessions appears to be increasingly alone in his quixotic anti-pot crusade.

Department of Homeland Security Secretary John Kelly recently went on Meet the Press and said, “Marijuana is not a factor in the Drug War,” and in late March, Sen. Ron Wyden, D-Oregon, and Rep. Earl Blumenauer, D-Oregon, unveiled the “Path to Marijuana Reform,” a bipartisan package of bills to address banking, taxation, civil forfeiture, decriminalization, descheduling, research and regulation of the booming cannabis industry.

The package includes the Small Business Tax Equity Act, which would create “an exception to IRC section 280E to allow businesses operating in compliance with state law to claim deductions and credits associated with the sale of marijuana like any other legal business.” Section 280E is a 1982 law meant to prevent illicit drug-dealers from claiming deductions related to the sale of narcotics. Sen. Rand Paul (R-Kentucky) is a co-sponsor of Wyden’s bill in the Senate, while Rep. Carlos Curbelo (R-Florida) is sponsoring companion legislation in the House.

The Responsibly Addressing the Marijuana Policy Gap Act would remove federal penalties and civil-asset forfeiture from individuals and businesses that are in compliance with state marijuana laws. The law would ensure access to banking, bankruptcy protection and advertising for marijuana businesses; expunge criminal records for select marijuana-related offenses; and ease barriers for medical-marijuana research. It would also end drug-testing requirements for federal civil service jobs in states where marijuana has been legalized.

The third bill, the Marijuana Revenue and Regulation Act, would remove marijuana from the Controlled Substances Act. It would impose a federal tax structure on pot products, define permitting for marijuana businesses, and regulate cannabis much like alcohol has been regulated for decades.

“This is common-sense legislation that will eliminate the growing tension between federal and state marijuana laws,” said Robert Capecchi, director of federal policies for the Marijuana Policy Project, in a statement on the organization’s website. “Voters and legislatures are rolling back antiquated state marijuana prohibition policies, and it’s time for Congress to step up at the federal level. States are adopting laws designed to improve public safety by replacing the illegal marijuana market with a tightly regulated system of production and sales. The federal government should be working to facilitate that transition, not hinder it.”

Published in Cannabis in the CV

Cannabis legalization is sweeping the nation quickly by American standards, and industry growth has been rapid in states where cannabis has been legally accepted in one way or another.

The cannabis industry is projected to reach $44 billion per year in revenue by 2025. State budgets are being balanced in part due to tax revenues from the cannabis industry. Jobs are getting created locally, and potential marijuana businesses are looking with hope toward each state-legalization initiative on the horizon.

But even as states line up to reap the financial rewards of legalization, the continuing federal ban on marijuana may leave American startups scrambling to find the investment dollars needed once they get the green light on a state level.

One prime example of how federal foot-dragging on cannabis-law reform is inhibiting industry growth is Section 280E of the U.S. tax code. It prohibits the deduction of expenses related to controlled substances on federal tax returns. The means that cannabis businesses cannot deduct the basic business expenses allowed for any other retail, manufacturing or distribution business—even though the businesses are perfectly legal under state laws. One dispensary owner in Colorado estimates he pays the IRS an extra $600,000 a year because he is not allowed these deductions. That’s not a small chunk of change when you consider the exorbitant taxes already levied on cannabis businesses.

Issues like this, as well as the banking difficulties faced by the cannabis industry—federal law makes it very difficult for a marijuana business to even have a bank account—make the industry look like a less-than-safe investment. Rescheduling marijuana to anything but the Drug Enforcement Administration’s Schedule 1 would eliminate this hurdle, and would allow banking options and Federal Deposit Insurance Corporation coverage to the exploding industry.

Of course, there’s a hashtag for that: #Reschedule420, brought to you by DCMJ.org. That’s the organization that brought a 50-foot joint to the White House on April 2 of this year in protest of the president’s inaction on cannabis reform. (Get it? Reschedule 4/20?)

In a recent letter to Congress, the DEA hinted at rescheduling marijuana or (removing it from the schedules altogether) sometime this summer. We’ve heard that one before, but combine that with the administration’s recent approval of the first official testing for cannabis as a PTSD treatment, as well as massive shifts in public opinion, and there may be a ray of hope this time around. In addition to making cannabis research much more accessible to American companies, a change in DEA cannabis policy would remove most of the remaining hurdles to development of the cannabis industry nationwide: Section 280E would no longer apply to cannabis business, and banks would be able to fling their doors open to all those now-legit former narco dollars.

But in the meantime … here comes Canada.

Justin Trudeau, Canada’s liberal rock-star prime minister, has vowed to legalize recreational cannabis on a federal level in the Great White North—posthaste. This forward thinking provides an opportunity for more secure investment and less restrictive tax policy, and would allow banks to treat cannabis businesses as they do any other legitimate business. This offers cannabis investors another North American option in one of the fastest-growing industries in recent history.

In addition to the obvious business advantages Canada would enjoy over the United States, quick legalization would also put Canada years ahead of the U.S. in medical-cannabis research. This would allow Canadian companies to be first to market with breakthroughs in medical uses of a plant that seems to be effective in treating something new every week. While Canada has yet to legalize, it looks like it will do so on a federal level well before most U.S. states do. If or when that happens, American cannabis startups may find potential investors instead looking north for greener pastures.

One needs only to look at Desert Hot Springs to see how cannabis can help struggling local economies. What has historically been a city with perpetual economic struggles is now being praised as the future center of the cannabis industry in California; you probably saw the huge front-page article in the May 10 Los Angeles Times touting the city as Desert Pot Springs. So much pot will be produced in DHS that people are moving there from pot meccas like Amsterdam to supply those operations, as is the case with Grow Shop Hydroponics. GSH is located in North Palm Springs with easy access to what will be some of the largest commercial grows in the world. Real estate in DHS is now being snatched up for as much as twice the market value—and recreational use in California hasn’t even become law yet.

By dragging its feet, the DEA would send billions in investment dollars and revenue north of the border, and would further hinder the development of the cannabis industry here in the United States. It’s a fact: Legalization will happen in the United States. If we allow our government to delay the inevitable, that hesitation will cost us all dearly economically—and put us in a position of playing a desperate game of catch-up in medical cannabis research.

Published in Cannabis in the CV